- Reported net income attributable to Valero stockholders of $162
million, or $0.39 per share.
- Reported adjusted net income attributable to Valero
stockholders of $197 million, or $0.48 per share.
- Returned $401 million in cash to stockholders through
dividends.
- Declared a regular quarterly cash dividend of $0.98 per share
payable in the third quarter.
- Advanced the expected completion of the Diamond Green Diesel
project at Port Arthur (DGD 3) to the first half of 2023 versus the
prior estimate of the second half of 2023.
Valero Energy Corporation (NYSE: VLO, “Valero”) today reported
net income attributable to Valero stockholders of $162 million, or
$0.39 per share, for the second quarter of 2021, compared to $1.3
billion, or $3.07 per share, for the second quarter of 2020.
Excluding the adjustments shown in the accompanying earnings
release tables, second quarter 2021 adjusted net income
attributable to Valero stockholders was $197 million, or $0.48 per
share, compared to an adjusted net loss attributable to Valero
stockholders of $504 million, or $1.25 per share, in the second
quarter of 2020. Second quarter 2020 adjusted results exclude the
benefit from an after-tax lower of cost or market, or LCM,
inventory valuation adjustment of $1.8 billion.
Refining
The refining segment reported $349 million of operating income
for the second quarter of 2021, compared to $1.8 billion for the
second quarter of 2020. The second quarter 2021 adjusted operating
income was $361 million, compared to an adjusted operating loss of
$383 million in the second quarter of 2020, which excludes the LCM
inventory valuation adjustment. Refinery throughput volumes
averaged 2.8 million barrels per day in the second quarter of 2021,
which was 514 thousand barrels per day higher than the second
quarter of 2020.
“Our system’s flexibility and the team’s relentless focus on
optimization in a weak, but otherwise improving, margin environment
enabled us to deliver positive earnings in the second quarter,”
said Joe Gorder, Valero Chairman and Chief Executive Officer. “More
importantly, cash provided by operating activities more than
covered our cash used in investing and financing activities for the
quarter, even without the cash benefits from our receipt of the
2020 income tax refund and the proceeds from the sale of a portion
of our interest in the Pasadena terminal.”
Renewable Diesel
The renewable diesel segment, which consists of the Diamond
Green Diesel (DGD) joint venture, reported $248 million of
operating income for the second quarter of 2021, compared to $129
million for the second quarter of 2020. Renewable diesel sales
volumes averaged 923 thousand gallons per day in the second quarter
of 2021, which was 128 thousand gallons per day higher than the
second quarter of 2020.
“Our renewable diesel segment continues to perform exceptionally
well,” said Gorder. “The segment once again set records for
renewable diesel operating income and sales volumes, highlighting
DGD’s ability to process a wide range of discounted feedstocks,
combined with Valero’s operational and technical expertise.”
Ethanol
The ethanol segment reported $99 million of operating income for
the second quarter of 2021, compared to $91 million for the second
quarter of 2020. Excluding the LCM inventory valuation adjustment,
the second quarter 2020 adjusted operating loss was $20 million.
Ethanol production volumes averaged 4.2 million gallons per day in
the second quarter of 2021, which was 1.9 million gallons per day
higher than the second quarter of 2020.
Corporate and Other
General and administrative expenses were $176 million in the
second quarter of 2021, compared to $169 million in the second
quarter of 2020. The effective tax rate for the second quarter of
2021 was 37 percent, which is higher than the second quarter of
2020 due to the remeasurement of our deferred tax liabilities
primarily as a result of an increase in the U.K. statutory tax rate
that will be effective in 2023.
Investing and Financing Activities
Capital investments totaled $548 million in the second quarter
of 2021, of which $252 million was for sustaining the business,
including costs for turnarounds, catalysts and regulatory
compliance. Excluding capital investments attributable to our
partner’s 50 percent share of DGD and those related to other
variable interest entities, capital investments attributable to
Valero were $417 million.
Net cash provided by operating activities was $2.0 billion in
the second quarter of 2021. Included in this amount was a $1.1
billion favorable impact from working capital and $132 million
associated with our joint venture partner’s share of DGD’s net cash
provided by operating activities, excluding changes in DGD’s
working capital. Excluding these items, adjusted net cash provided
by operating activities was $809 million.
Valero returned $401 million to stockholders through dividends
for a payout ratio of 50 percent of adjusted net cash provided by
operating activities in the second quarter of 2021.
Valero continues to target a long-term total payout ratio
between 40 and 50 percent of adjusted net cash provided by
operating activities. Valero defines total payout ratio as the sum
of dividends and stock buybacks divided by net cash provided by
operating activities adjusted for changes in working capital and
DGD’s net cash provided by operating activities, excluding changes
in its working capital, attributable to our joint venture partner’s
ownership interest in DGD.
Liquidity and Financial Position
Valero ended the second quarter of 2021 with $14.7 billion of
total debt and finance lease obligations and $3.6 billion of cash
and cash equivalents. The debt to capitalization ratio, net of cash
and cash equivalents, was 37 percent as of June 30, 2021.
Strategic Update
Valero continues to advance economic projects that lower the
carbon intensity of its products. The large-scale carbon
sequestration project with BlackRock and Navigator is moving ahead
with strong interest from additional parties in the binding open
season. Valero is expected to be the anchor shipper with eight of
Valero’s ethanol plants connected to this system, producing a lower
carbon intensity ethanol product to be marketed in low-carbon fuel
markets.
In addition, Valero and its joint venture partner continue to
steadily expand DGD’s capacity to produce low-carbon intensity
renewable diesel. The DGD plant expansion at St. Charles (DGD 2),
which is expected to increase renewable diesel production capacity
by 400 million gallons per year, remains on budget and is still on
track to be completed and operational in the middle of the fourth
quarter of 2021. The St. Charles expansion will also provide the
capability to market 30 million gallons per year of renewable
naphtha into low-carbon fuel markets. The new DGD plant at Port
Arthur (DGD 3), which is expected to increase renewable diesel
production capacity by 470 million gallons per year, is also
progressing well and is now expected to commence operations in the
first half of 2023, increasing DGD’s total annual production
capacity to approximately 1.2 billion gallons of renewable diesel
and 50 million gallons of renewable naphtha.
Refinery optimization projects that are expected to reduce cost
and improve margin capture are progressing on schedule. The
Pembroke Cogen project is on track to be completed in the third
quarter of 2021 and the Port Arthur Coker project is expected to be
completed in 2023.
Capital investments attributable to Valero are forecasted to be
$2.0 billion in 2021, of which approximately 60 percent is for
sustaining the business and approximately 40 percent is for growth
projects. Over half of Valero’s 2021 growth capital is allocated to
expanding the renewable diesel business.
“As demand for low-carbon fuels expands globally, we continue to
expand our long-term competitive advantage through innovation in
renewables,” said Gorder. “In addition to quadrupling our renewable
diesel production capacity in the next couple of years, we are
evaluating and developing other renewable fuels opportunities with
carbon sequestration, renewable naphtha, sustainable aviation fuel,
and renewable hydrogen.”
Conference Call
Valero’s senior management will hold a conference call at 10
a.m. ET today to discuss this earnings release and to provide an
update on operations and strategy.
About Valero
Valero Energy Corporation, through its subsidiaries
(collectively, “Valero”), is an international manufacturer and
marketer of transportation fuels and petrochemical products. Valero
is a Fortune 500 company based in San Antonio, Texas, and owns 15
petroleum refineries with a combined throughput capacity of
approximately 3.2 million barrels per day and 13 ethanol plants
with a combined production capacity of approximately 1.7 billion
gallons per year. The petroleum refineries are located in the
United States (U.S.), Canada and the United Kingdom (U.K.), and the
ethanol plants are located in the Mid-Continent region of the U.S.
Valero is also a joint venture partner in Diamond Green Diesel,
which owns and operates a renewable diesel plant in Norco,
Louisiana. Diamond Green Diesel is North America’s largest
biomass-based diesel plant. Valero sells its products in the
wholesale rack or bulk markets in the U.S., Canada, the U.K.,
Ireland and Latin America. Approximately 7,000 outlets carry
Valero’s brand names. Please visit www.investorvalero.com for more
information.
Valero Contacts Investors: Homer Bhullar, Vice President
– Investor Relations and Finance, 210-345-1982 Eric Herbort, Senior
Manager – Investor Relations, 210-345-3331 Gautam Srivastava,
Senior Manager – Investor Relations, 210-345-3992 Media: Lillian
Riojas, Executive Director – Media Relations and Communications,
210-345-5002
Safe-Harbor Statement
Statements contained in this release and the accompanying tables
that state the company’s or management’s expectations or
predictions of the future are forward-looking statements intended
to be covered by the safe harbor provisions of the Securities Act
of 1933 and the Securities Exchange Act of 1934. The words
“believe,” “expect,” “should,” “estimates,” “intend,” “target,”
“will,” “plans,” “forecast,” and other similar expressions identify
forward-looking statements. Forward-looking statements in this
release and the accompanying tables include those relating to our
greenhouse gas emissions targets, expected timing of completion and
performance of projects, future market and industry conditions,
future operating and financial performance and management of future
risks. It is important to note that actual results could differ
materially from those projected in such forward-looking statements
based on numerous factors, including those outside of the company’s
control, such as delays in construction timing and other factors,
including but not limited to the impacts of COVID-19. For more
information concerning factors that could cause actual results to
differ from those expressed or forecasted, see Valero’s annual
report on Form 10-K, quarterly reports on Form 10-Q, and other
reports filed with the Securities and Exchange Commission and
available on Valero’s website at www.valero.com.
COVID-19 Disclosure
Some governmental authorities began lifting restrictions
intended to prevent the spread of COVID-19 in the latter part of
2020 and this has continued throughout the first six months of 2021
as the distribution of vaccines has helped decrease rates of
infection. These actions have contributed to increasing levels of
individual movement and travel and a resulting increase in the
demand for and market prices of our products. However, some
governmental authorities continue to impose, or have recently
reimposed, some level of restrictions due in part to new outbreaks,
including those related to new variants of the COVID-19 virus. The
ongoing distribution of vaccines may result in the continued
lifting of restrictions globally and may be seen as a key factor
contributing to the ongoing restoration of public confidence, and
thus also to stimulating and increasing economic activity. However,
the risk remains that vaccines may not be distributed widely on a
timely basis, they may not be as effective against new variants of
the virus, the distribution of some or all of the vaccines may be
paused or withdrawn due to concerns with potential side effects,
and/or the level of individuals’ willingness to receive a vaccine
may not be as strong or as timely as needed. Based on these and
other circumstances that cannot be predicted, the broader
implications of the pandemic on our results of operations and
financial position remain uncertain and may continue to be
significant. We believe we have proactively responded to many of
the known impacts of the pandemic on our business to the extent
practicable and we strive to continue to do so, but there can be no
assurance that these or other measures will be fully effective. For
more information, see our annual report on Form 10-K, quarterly
reports on Form 10-Q, and other reports filed with the Securities
and Exchange Commission.
Use of Non-GAAP Financial Information
This earnings release and the accompanying earnings release
tables include references to financial measures that are not
defined under U.S. generally accepted accounting principles (GAAP).
These non-GAAP measures include adjusted net income (loss)
attributable to Valero stockholders, adjusted earnings (loss) per
common share – assuming dilution, refining margin, renewable diesel
margin, ethanol margin, adjusted refining operating income (loss),
adjusted ethanol operating income (loss), adjusted net cash
provided by operating activities, and capital investments
attributable to Valero. These non-GAAP financial measures have been
included to help facilitate the comparison of operating results
between periods. See the accompanying earnings release tables for a
reconciliation of non-GAAP measures to their most directly
comparable U.S. GAAP measures. Note (f) to the earnings release
tables provides reasons for the use of these non-GAAP financial
measures.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Statement of income data
Revenues
$
27,748
$
10,397
$
48,554
$
32,499
Cost of sales:
Cost of materials and other (a)
25,249
9,079
44,241
29,031
Lower of cost or market (LCM) inventory
valuation adjustment (b)
—
(2,248
)
—
294
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
1,214
1,027
2,870
2,151
Depreciation and amortization expense
576
566
1,142
1,135
Total cost of sales
27,039
8,424
48,253
32,611
Other operating expenses
12
3
50
5
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
176
169
384
346
Depreciation and amortization expense
12
12
24
25
Operating income (loss)
509
1,789
(157
)
(488
)
Other income, net (c)
102
27
147
59
Interest and debt expense, net of
capitalized interest
(150
)
(142
)
(299
)
(267
)
Income (loss) before income tax expense
(benefit)
461
1,674
(309
)
(696
)
Income tax expense (benefit) (d)
169
339
21
(277
)
Net income (loss)
292
1,335
(330
)
(419
)
Less: Net income attributable to
noncontrolling interests
130
82
212
179
Net income (loss) attributable to Valero
Energy Corporation stockholders
$
162
$
1,253
$
(542
)
$
(598
)
Earnings (loss) per common
share
$
0.39
$
3.07
$
(1.34
)
$
(1.48
)
Weighted-average common shares outstanding
(in millions)
407
406
407
407
Earnings (loss) per common share –
assuming dilution
$
0.39
$
3.07
$
(1.34
)
$
(1.48
)
Weighted-average common shares outstanding
– assuming dilution (in millions) (e)
407
407
407
407
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS BY
SEGMENT
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Three months ended June 30,
2021
Revenues:
Revenues from external customers
$
25,968
$
496
$
1,284
$
—
$
27,748
Intersegment revenues
1
76
84
(161
)
—
Total revenues
25,969
572
1,368
(161
)
27,748
Cost of sales:
Cost of materials and other
24,000
281
1,130
(162
)
25,249
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,064
31
119
—
1,214
Depreciation and amortization expense
544
12
20
—
576
Total cost of sales
25,608
324
1,269
(162
)
27,039
Other operating expenses
12
—
—
—
12
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
176
176
Depreciation and amortization expense
—
—
—
12
12
Operating income by segment
$
349
$
248
$
99
$
(187
)
$
509
Three months ended June 30,
2020
Revenues:
Revenues from external customers
$
9,615
$
239
$
543
$
—
$
10,397
Intersegment revenues
2
57
38
(97
)
—
Total revenues
9,617
296
581
(97
)
10,397
Cost of sales:
Cost of materials and other
8,539
135
501
(96
)
9,079
LCM inventory valuation adjustment (b)
(2,137
)
—
(111
)
—
(2,248
)
Operating expenses (excluding depreciation
and amortization expense reflected below)
928
20
79
—
1,027
Depreciation and amortization expense
533
12
21
—
566
Total cost of sales
7,863
167
490
(96
)
8,424
Other operating expenses
3
—
—
—
3
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
169
169
Depreciation and amortization expense
—
—
—
12
12
Operating income by segment
$
1,751
$
129
$
91
$
(182
)
$
1,789
See Operating Highlights by
Segment.
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
FINANCIAL HIGHLIGHTS BY
SEGMENT
(millions of dollars)
(unaudited)
Refining
Renewable
Diesel
Ethanol
Corporate and
Eliminations
Total
Six months ended June 30, 2021
Revenues:
Revenues from external customers
$
45,437
$
848
$
2,269
$
—
$
48,554
Intersegment revenues
4
155
144
(303
)
—
Total revenues
45,441
1,003
2,413
(303
)
48,554
Cost of sales:
Cost of materials and other (a)
42,022
468
2,054
(303
)
44,241
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
2,535
60
275
—
2,870
Depreciation and amortization expense
1,077
24
41
—
1,142
Total cost of sales
45,634
552
2,370
(303
)
48,253
Other operating expenses
50
—
—
—
50
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
384
384
Depreciation and amortization expense
—
—
—
24
24
Operating income (loss) by segment
$
(243
)
$
451
$
43
$
(408
)
$
(157
)
Six months ended June 30, 2020
Revenues:
Revenues from external customers
$
30,600
$
545
$
1,354
$
—
$
32,499
Intersegment revenues
4
110
102
(216
)
—
Total revenues
30,604
655
1,456
(216
)
32,499
Cost of sales:
Cost of materials and other
27,666
265
1,314
(214
)
29,031
LCM inventory valuation adjustment (b)
277
—
17
—
294
Operating expenses (excluding depreciation
and amortization expense reflected below)
1,923
40
188
—
2,151
Depreciation and amortization expense
1,069
23
43
—
1,135
Total cost of sales
30,935
328
1,562
(214
)
32,611
Other operating expenses
5
—
—
—
5
General and administrative expenses
(excluding depreciation and amortization expense reflected
below)
—
—
—
346
346
Depreciation and amortization expense
—
—
—
25
25
Operating income (loss) by segment
$
(336
)
$
327
$
(106
)
$
(373
)
$
(488
)
See Operating Highlights by
Segment.
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(f)
(millions of dollars, except
per share amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of net income (loss)
attributable to Valero Energy Corporation stockholders to
adjusted net income (loss) attributable to Valero Energy
Corporation stockholders
Net income (loss) attributable to Valero
Energy Corporation stockholders
$
162
$
1,253
$
(542
)
$
(598
)
Adjustments:
Gain on sale of MVP interest (c)
(62
)
—
(62
)
—
Income tax expense related to gain on sale
of MVP interest
14
—
14
—
Gain on sale of MVP interest, net of
taxes
(48
)
—
(48
)
—
Diamond Pipeline asset impairment (c)
24
—
24
—
Income tax benefit related to Diamond
Pipeline asset impairment
(5
)
—
(5
)
—
Diamond Pipeline asset impairment, net of
taxes
19
—
19
—
Income tax expense related to change in
statutory tax rates (d)
64
—
64
—
LCM inventory valuation adjustment (b)
—
(2,248
)
—
294
Income tax expense (benefit) related to
the LCM inventory valuation adjustment
—
491
—
(60
)
LCM inventory valuation adjustment, net of
taxes
—
(1,757
)
—
234
Total adjustments
35
(1,757
)
35
234
Adjusted net income (loss) attributable to
Valero Energy Corporation stockholders
$
197
$
(504
)
$
(507
)
$
(364
)
Reconciliation of earnings (loss) per
common share – assuming dilution to adjusted earnings (loss)
per common share – assuming dilution
Earnings (loss) per common share –
assuming dilution (e)
$
0.39
$
3.07
$
(1.34
)
$
(1.48
)
Adjustments:
Gain on sale of MVP interest (c)
(0.12
)
—
(0.12
)
—
Diamond Pipeline asset impairment (c)
0.05
—
0.05
—
Income tax expense related to change in
statutory tax rates (d)
0.16
—
0.16
—
LCM inventory valuation adjustment (b)
—
(4.32
)
—
0.58
Total adjustments
0.09
(4.32
)
0.09
0.58
Adjusted earnings (loss) per common share
– assuming dilution (e)
$
0.48
$
(1.25
)
$
(1.25
)
$
(0.90
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(f)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of operating income
(loss) by segment to segment margin, and reconciliation of
operating income (loss) by segment to adjusted operating
income (loss) by segment
Refining segment
Refining operating income (loss)
$
349
$
1,751
$
(243
)
$
(336
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(2,137
)
—
277
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
1,064
928
2,535
1,923
Depreciation and amortization expense
544
533
1,077
1,069
Other operating expenses
12
3
50
5
Refining margin
$
1,969
$
1,078
$
3,419
$
2,938
Refining operating income (loss)
$
349
$
1,751
$
(243
)
$
(336
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(2,137
)
—
277
Other operating expenses
12
3
50
5
Adjusted refining operating income
(loss)
$
361
$
(383
)
$
(193
)
$
(54
)
Renewable diesel segment
Renewable diesel operating income
$
248
$
129
$
451
$
327
Adjustments:
Operating expenses (excluding depreciation
and amortization expense reflected below)
31
20
60
40
Depreciation and amortization expense
12
12
24
23
Renewable diesel margin
$
291
$
161
$
535
$
390
Ethanol segment
Ethanol operating income (loss)
$
99
$
91
$
43
$
(106
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(111
)
—
17
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
119
79
275
188
Depreciation and amortization expense
20
21
41
43
Ethanol margin
$
238
$
80
$
359
$
142
Ethanol operating income (loss)
$
99
$
91
$
43
$
(106
)
Adjustment: LCM inventory valuation
adjustment (b)
—
(111
)
—
17
Adjusted ethanol operating income
(loss)
$
99
$
(20
)
$
43
$
(89
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(f)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of refining segment
operating income (loss) to refining margin (by region), and
reconciliation of refining segment operating income (loss)
to adjusted refining segment operating income (loss) (by
region) (g)
U.S. Gulf Coast region
Refining operating income (loss)
$
159
$
892
$
(349
)
$
(50
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(1,109
)
—
4
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
611
535
1,605
1,093
Depreciation and amortization expense
334
327
666
661
Other operating expenses
10
2
41
2
Refining margin
$
1,114
$
647
$
1,963
$
1,710
Refining operating income (loss)
$
159
$
892
$
(349
)
$
(50
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(1,109
)
—
4
Other operating expenses
10
2
41
2
Adjusted refining operating income
(loss)
$
169
$
(215
)
$
(308
)
$
(44
)
U.S. Mid-Continent region
Refining operating income
$
123
$
293
$
113
$
73
Adjustments:
LCM inventory valuation adjustment (b)
—
(283
)
—
—
Operating expenses (excluding depreciation
and amortization expense reflected below) (a)
159
148
349
312
Depreciation and amortization expense
85
83
169
166
Other operating expenses
2
—
9
—
Refining margin
$
369
$
241
$
640
$
551
Refining operating income
$
123
$
293
$
113
$
73
Adjustments:
LCM inventory valuation adjustment (b)
—
(283
)
—
—
Other operating expenses
2
—
9
—
Adjusted refining operating income
$
125
$
10
$
122
$
73
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RECONCILIATION OF NON-GAAP
MEASURES TO MOST COMPARABLE AMOUNTS
REPORTED UNDER U.S. GAAP
(f)
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of refining segment
operating income (loss) to refining margin (by region), and
reconciliation of refining segment operating income (loss)
to adjusted refining segment operating income (loss) (by
region) (g) (continued)
North Atlantic region
Refining operating income (loss)
$
1
$
597
$
56
$
(117
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(657
)
—
217
Operating expenses (excluding depreciation
and amortization expense reflected below)
151
112
291
253
Depreciation and amortization expense
59
52
111
105
Other operating expenses
—
1
—
3
Refining margin
$
211
$
105
$
458
$
461
Refining operating income (loss)
$
1
$
597
$
56
$
(117
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(657
)
—
217
Other operating expenses
—
1
—
3
Adjusted refining operating income
(loss)
$
1
$
(59
)
$
56
$
103
U.S. West Coast region
Refining operating income (loss)
$
66
$
(31
)
$
(63
)
$
(242
)
Adjustments:
LCM inventory valuation adjustment (b)
—
(88
)
—
56
Operating expenses (excluding depreciation
and amortization expense reflected below)
143
133
290
265
Depreciation and amortization expense
66
71
131
137
Refining margin
$
275
$
85
$
358
$
216
Refining operating income (loss)
$
66
$
(31
)
$
(63
)
$
(242
)
Adjustment: LCM inventory valuation
adjustment (b)
—
(88
)
—
56
Adjusted refining operating income
(loss)
$
66
$
(119
)
$
(63
)
$
(186
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Throughput volumes (thousand barrels
per day)
Feedstocks:
Heavy sour crude oil
389
378
372
369
Medium/light sour crude oil
330
385
303
363
Sweet crude oil
1,421
1,018
1,282
1,234
Residuals
249
169
221
202
Other feedstocks
126
69
114
85
Total feedstocks
2,515
2,019
2,292
2,253
Blendstocks and other
320
302
332
320
Total throughput volumes
2,835
2,321
2,624
2,573
Yields (thousand barrels per
day)
Gasolines and blendstocks
1,432
1,061
1,312
1,189
Distillates
1,035
835
965
940
Other products (h)
401
434
377
456
Total yields
2,868
2,330
2,654
2,585
Operating statistics (a) (f)
(i)
Refining margin
$
1,969
$
1,078
$
3,419
$
2,938
Adjusted refining operating income
(loss)
$
361
$
(383
)
$
(193
)
$
(54
)
Throughput volumes (thousand barrels per
day)
2,835
2,321
2,624
2,573
Refining margin per barrel of
throughput
$
7.64
$
5.10
$
7.20
$
6.27
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.13
4.39
5.34
4.10
Depreciation and amortization expense per
barrel of throughput
2.11
2.53
2.27
2.28
Adjusted refining operating income (loss)
per barrel of throughput
$
1.40
$
(1.82
)
$
(0.41
)
$
(0.11
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
RENEWABLE DIESEL SEGMENT
OPERATING HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Operating statistics (f) (i)
Renewable diesel margin
$
291
$
161
$
535
$
390
Renewable diesel operating income
$
248
$
129
$
451
$
327
Sales volumes (thousand gallons per
day)
923
795
895
831
Renewable diesel margin per gallon of
sales
$
3.46
$
2.22
$
3.30
$
2.58
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per gallon of sales
0.36
0.29
0.37
0.27
Depreciation and amortization expense per
gallon of sales
0.15
0.15
0.15
0.15
Renewable diesel operating income per
gallon of sales
$
2.95
$
1.78
$
2.78
$
2.16
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
ETHANOL SEGMENT OPERATING
HIGHLIGHTS
(millions of dollars, except
per gallon amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Operating statistics (a) (f)
(i)
Ethanol margin
$
238
$
80
$
359
$
142
Adjusted ethanol operating income
(loss)
$
99
$
(20
)
$
43
$
(89
)
Production volumes (thousand gallons per
day)
4,203
2,316
3,884
3,210
Ethanol margin per gallon of
production
$
0.62
$
0.38
$
0.51
$
0.24
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per gallon of
production
0.31
0.38
0.39
0.32
Depreciation and amortization expense per
gallon of production
0.05
0.10
0.06
0.07
Adjusted ethanol operating income (loss)
per gallon of production
$
0.26
$
(0.10
)
$
0.06
$
(0.15
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Operating statistics by region
(g)
U.S. Gulf Coast region (a) (f)
(i)
Refining margin
$
1,114
$
647
$
1,963
$
1,710
Adjusted refining operating income
(loss)
$
169
$
(215
)
$
(308
)
$
(44
)
Throughput volumes (thousand barrels per
day)
1,731
1,385
1,623
1,527
Refining margin per barrel of
throughput
$
7.07
$
5.13
$
6.68
$
6.15
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
3.88
4.23
5.46
3.93
Depreciation and amortization expense per
barrel of throughput
2.12
2.60
2.27
2.37
Adjusted refining operating income (loss)
per barrel of throughput
$
1.07
$
(1.70
)
$
(1.05
)
$
(0.15
)
U.S. Mid-Continent region (a) (f)
(i)
Refining margin
$
369
$
241
$
640
$
551
Adjusted refining operating income
$
125
$
10
$
122
$
73
Throughput volumes (thousand barrels per
day)
476
364
431
398
Refining margin per barrel of
throughput
$
8.52
$
7.28
$
8.21
$
7.61
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
3.67
4.47
4.48
4.32
Depreciation and amortization expense per
barrel of throughput
1.98
2.51
2.17
2.29
Adjusted refining operating income per
barrel of throughput
$
2.87
$
0.30
$
1.56
$
1.00
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
REFINING SEGMENT OPERATING
HIGHLIGHTS BY REGION
(millions of dollars, except
per barrel amounts)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Operating statistics by region (g)
(continued)
North Atlantic region (f) (i)
Refining margin
$
211
$
105
$
458
$
461
Adjusted refining operating income
(loss)
$
1
$
(59
)
$
56
$
103
Throughput volumes (thousand barrels per
day)
356
340
338
414
Refining margin per barrel of
throughput
$
6.52
$
3.40
$
7.48
$
6.12
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
4.66
3.64
4.76
3.36
Depreciation and amortization expense per
barrel of throughput
1.85
1.67
1.81
1.39
Adjusted refining operating income (loss)
per barrel of throughput
$
0.01
$
(1.91
)
$
0.91
$
1.37
U.S. West Coast region (f) (i)
Refining margin
$
275
$
85
$
358
$
216
Adjusted refining operating income
(loss)
$
66
$
(119
)
$
(63
)
$
(186
)
Throughput volumes (thousand barrels per
day)
272
232
232
234
Refining margin per barrel of
throughput
$
11.12
$
3.98
$
8.54
$
5.06
Less:
Operating expenses (excluding depreciation
and amortization expense reflected below) per barrel of
throughput
5.79
6.26
6.92
6.21
Depreciation and amortization expense per
barrel of throughput
2.63
3.37
3.11
3.22
Adjusted refining operating income (loss)
per barrel of throughput
$
2.70
$
(5.65
)
$
(1.49
)
$
(4.37
)
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Refining
Feedstocks (dollars per barrel)
Brent crude oil
$
69.00
$
33.22
$
65.05
$
42.06
Brent less West Texas Intermediate (WTI)
crude oil
2.91
5.42
3.09
5.17
Brent less Alaska North Slope (ANS) crude
oil
0.56
2.85
0.45
1.18
Brent less Louisiana Light Sweet (LLS)
crude oil
1.05
2.95
1.08
2.85
Brent less Argus Sour Crude Index (ASCI)
crude oil
3.34
4.14
3.17
4.58
Brent less Maya crude oil
6.13
9.05
5.42
9.40
LLS crude oil
67.95
30.27
63.97
39.21
LLS less ASCI crude oil
2.29
1.19
2.09
1.73
LLS less Maya crude oil
5.08
6.10
4.34
6.55
WTI crude oil
66.09
27.80
61.96
36.89
Natural gas (dollars per million
British Thermal Units)
2.93
1.65
11.30
1.74
Products (dollars per barrel)
U.S. Gulf Coast:
Conventional Blendstock of Oxygenate
Blending (CBOB) gasoline less Brent
14.43
0.51
12.28
1.44
Ultra-low-sulfur (ULS) diesel less
Brent
12.99
4.89
11.59
8.08
Propylene less Brent
(20.41
)
(12.71
)
(0.96
)
(16.88
)
CBOB gasoline less LLS
15.48
3.46
13.36
4.29
ULS diesel less LLS
14.04
7.84
12.67
10.93
Propylene less LLS
(19.36
)
(9.76
)
0.12
(14.03
)
U.S. Mid-Continent:
CBOB gasoline less WTI
19.93
6.19
17.38
6.94
ULS diesel less WTI
18.42
11.38
17.82
14.35
North Atlantic:
CBOB gasoline less Brent
17.37
3.03
14.47
3.66
ULS diesel less Brent
15.07
6.94
13.48
10.62
U.S. West Coast:
California Reformulated Gasoline
Blendstock of Oxygenate Blending (CARBOB) 87 gasoline less ANS
27.18
9.43
20.87
8.63
California Air Resources Board (CARB)
diesel less ANS
15.28
10.36
14.71
13.79
CARBOB 87 gasoline less WTI
29.53
12.00
23.51
12.62
CARB diesel less WTI
17.63
12.93
17.35
17.78
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
AVERAGE MARKET REFERENCE
PRICES AND DIFFERENTIALS
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Renewable diesel
New York Mercantile Exchange ULS diesel
(dollars per gallon)
$
2.00
$
0.97
$
1.87
$
1.26
Biodiesel Renewable Identification Number
(RIN) (dollars per RIN)
1.71
0.54
1.44
0.50
California Low-Carbon Fuel Standard
(dollars per metric ton)
184.82
201.01
190.06
203.52
Chicago Board of Trade (CBOT) soybean oil
(dollars per pound)
0.63
0.27
0.56
0.29
Ethanol
CBOT corn (dollars per bushel)
6.58
3.23
5.98
3.49
New York Harbor ethanol (dollars per
gallon)
2.38
1.17
2.08
1.25
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars, except
per share amounts)
(unaudited)
June 30, 2021
December 31,
2020
Balance sheet data
Current assets
$
19,372
$
15,844
Cash and cash equivalents included in
current assets
3,572
3,313
Inventories included in current assets
6,103
6,038
Current liabilities
14,214
9,283
Current portion of debt and finance lease
obligations included in current liabilities
1,044
723
Debt and finance lease obligations, less
current portion
13,636
13,954
Total debt and finance lease
obligations
14,680
14,677
Valero Energy Corporation stockholders’
equity
17,651
18,801
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of net cash used in
operating activities to adjusted net cash provided by
operating activities (f)
Net cash provided by operating
activities
$
2,008
$
736
$
1,956
$
687
Exclude:
Changes in current assets and current
liabilities
1,067
629
1,251
(478
)
Diamond Green Diesel LLC’s (DGD) adjusted
net cash provided by operating activities attributable to our joint
venture partner’s ownership interest in DGD
132
69
240
173
Adjusted net cash provided by operating
activities
$
809
$
38
$
465
$
992
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Dividends per common share
$
0.98
$
0.98
$
1.96
$
1.96
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
EARNINGS RELEASE
TABLES
OTHER FINANCIAL DATA
(millions of dollars)
(unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
Reconciliation of total capital
investments to capital investments attributable to Valero
(f)
Capital expenditures (excluding variable
interest entities (VIEs))
$
101
$
256
$
261
$
555
Capital expenditures of VIEs:
DGD
245
103
398
177
Other VIEs
9
81
35
143
Deferred turnaround and catalyst cost
expenditures (excluding VIEs)
196
128
426
437
Deferred turnaround and catalyst cost
expenditures of DGD
—
6
1
10
Investments in unconsolidated joint
ventures
(3
)
10
9
29
Total capital investments
548
584
1,130
1,351
Adjustments:
DGD’s capital investments attributable to
our joint venture partner
(122
)
(55
)
(199
)
(94
)
Capital expenditures of other VIEs
(9
)
(81
)
(35
)
(143
)
Capital investments attributable to
Valero
$
417
$
448
$
896
$
1,114
See Notes to Earnings Release
Tables.
VALERO ENERGY
CORPORATION
NOTES TO EARNINGS RELEASE
TABLES
(a)
In mid-February 2021, many of our
refineries and plants were impacted to varying extents by the
severe cold, utility disruptions, and higher energy costs arising
out of Winter Storm Uri. The higher energy costs resulted from an
increase in the prices of natural gas and electricity that
significantly exceeded rates that we consider normal, such as the
average rates we incurred the month preceding the storm. As a
result, our operating loss for the six months ended June 30, 2021
includes estimated excess energy costs of $579 million ($1.15 per
share).
The above-mentioned pre-tax
estimated excess energy charge is reflected in our statement of
income line items and attributable to our reportable segments as
follows (in millions):
Refining
Renewable
Diesel
Ethanol
Total
Cost of materials and other
$
47
$
—
$
—
$
47
Operating expenses (excluding depreciation
and amortization expense)
478
—
54
532
Total estimated excess energy costs
$
525
$
—
$
54
$
579
The estimated excess energy costs
attributable to our refining segment are associated with the
refining segment regions as follows (in millions, except per barrel
amounts):
U.S. Gulf Coast
U.S. Mid-
Continent
Other Regions
Combined
Refining
Segment
Cost of materials and other
$
45
$
2
$
—
$
47
Operating expenses (excluding depreciation
and amortization expense)
437
38
3
478
Total estimated excess energy costs
$
482
$
40
$
3
$
525
Effect of estimated excess energy
costs on operating statistics (i)
Refining margin per barrel of throughput
(f)
$
0.15
$
0.03
n/a
$
0.10
Operating expenses (excluding depreciation
and amortization expense) per barrel of throughput
1.49
0.49
n/a
1.01
Adjusted refining operating income (loss)
per barrel of throughput (f)
$
1.64
$
0.52
n/a
$
1.11
The estimated excess energy costs
attributable to our ethanol segment affected that segment’s
operating statistics of operating expenses (excluding depreciation
and amortization expenses) per gallon of production and adjusted
operating loss per gallon of production by $0.08 (see note (f)
below).
(b)
The market value of our inventories
accounted for under the last-in, first-out (LIFO) method fell below
their historical cost on an aggregate basis as of March 31, 2020.
As a result, we recorded an LCM inventory valuation adjustment of
$2.5 billion in March 2020. The market value of our LIFO
inventories improved as of June 30, 2020 due to an increase in
market prices, which resulted in a reversal of $2.2 billion of the
$2.5 billion LCM adjustment recorded in the three months ended
March 31, 2020. Consequently, our results of operations for the six
months ended June 30, 2020 reflect a net LCM inventory valuation
adjustment of $294 million.
Of the $2.2 billion benefit recognized in
the three months ended June 30, 2020, $2.1 billion and $111 million
is attributable to our refining and ethanol segments, respectively.
Of the $294 million adjustment recognized in the six months ended
June 30, 2020, $277 million and $17 million is attributable to our
refining and ethanol segments, respectively.
(c)
On April 19, 2021, we sold a 24.99 percent
membership interest in MVP Terminalling, LLC (MVP), an
unconsolidated joint venture with a subsidiary of Magellan
Midstream Partners, L.P., for $270 million. “Other income, net” for
the three and six months ended June 30, 2021 includes a gain on the
sale of $62 million.
“Other income, net” for the three and six
months ended June 30, 2021 also includes a $24 million charge
representing our portion of the asset impairment loss recognized by
Diamond Pipeline LLC, an unconsolidated joint venture with a
subsidiary of Plains All American Pipeline, L.P., resulting from
the joint venture’s cancellation of its pipeline extension
project.
(d)
During the three months ended June 30,
2021, a change in certain statutory tax rates (primarily an
increase in the U.K. rate from 19 percent to 25 percent effective
in 2023) resulted in the remeasurement of our deferred tax
liabilities. Under U.S. generally accepted accounting principles
(GAAP), we are required to recognize the effect of a change in tax
law in the period of enactment. As a result, we recognized income
tax expense of $64 million during the three and six months ended
June 30, 2021, which represents the net increase in our deferred
tax liabilities resulting from the change in the tax rates.
(e)
Common equivalent shares have been
excluded from the computation of loss per common share – assuming
dilution and adjusted loss per common share – assuming dilution for
the six months ended June 30, 2021 and 2020, as the effect of
including such shares is antidilutive.
Common equivalent shares have also been
excluded from the computation of adjusted loss per common share –
assuming dilution for the three months ended June 30, 2020, as the
effect of including such shares is antidilutive. Weighted-average
shares outstanding – assuming dilution used to calculate adjusted
loss per common share – assuming dilution is 406 million
shares.
(f)
We use certain financial measures (as
noted below) in the earnings release tables and accompanying
earnings release that are not defined under U.S. GAAP and are
considered to be non-GAAP measures.
We have defined these non-GAAP measures
and believe they are useful to the external users of our financial
statements, including industry analysts, investors, lenders, and
rating agencies. We believe these measures are useful to assess our
ongoing financial performance because, when reconciled to their
most comparable U.S. GAAP measures, they provide improved
comparability between periods after adjusting for certain items
that we believe are not indicative of our core operating
performance and that may obscure our underlying business results
and trends. These non-GAAP measures should not be considered as
alternatives to their most comparable U.S. GAAP measures nor should
they be considered in isolation or as a substitute for an analysis
of our results of operations as reported under U.S. GAAP. In
addition, these non-GAAP measures may not be comparable to
similarly titled measures used by other companies because we may
define them differently, which diminishes their utility.
Non-GAAP measures are as follows:
- Adjusted net income (loss) attributable to Valero Energy
Corporation stockholders is defined as net income (loss)
attributable to Valero Energy Corporation stockholders adjusted to
reflect the items noted below, along with their related income tax
effect. The income tax effect for the adjustments was calculated
using a combined federal and state statutory rate for the
U.S.-based adjustments of 22 percent and a local statutory income
tax rate for foreign-based adjustments. We have adjusted for these
items because we believe that they are not indicative of our core
operating performance and that their adjustment results in an
important measure of our ongoing financial performance to better
assess our underlying business results and trends. The basis for
our belief with respect to each adjustment is provided below.
– Gain on sale of MVP interest – The gain
on the sale of a 24.99 percent membership interest in MVP (see note
(c)) is not indicative of our ongoing operations.
– Diamond Pipeline asset impairment – The
asset impairment loss related to the cancellation of a capital
project associated with Diamond Pipeline LLC (see note (c)) is not
indicative of our ongoing operations.
– Income tax expense related to change in
statutory tax rates – The income tax expense related to a change in
certain statutory tax rates (see note (d)) is not indicative of
income tax expense associated with the pre-tax results for the
three and six months ended June 30, 2021.
– LCM inventory valuation adjustment – The
LCM inventory valuation adjustment, which is described in note (b),
is the result of the market value of our inventories as of June 30,
2020 falling below their historical cost, with the decline in
market value resulting from the decline in crude oil and product
market prices associated with the negative economic impacts from
the COVID-19 pandemic. The adjustment obscures our financial
performance because it does not result from decisions made by us;
therefore, we have excluded the adjustment from adjusted net income
(loss) attributable to Valero Energy Corporation stockholders.
- Adjusted earnings (loss) per common share – assuming
dilution is defined as adjusted net income (loss) attributable
to Valero Energy Corporation stockholders divided by the number of
weighted-average shares outstanding in the applicable period,
assuming dilution (see note (e)).
- Refining margin is defined as refining segment operating
income (loss) excluding the LCM inventory valuation adjustment (see
note (b)), operating expenses (excluding depreciation and
amortization expense), depreciation and amortization expense, and
other operating expenses. We believe refining margin is an
important measure of our refining segment’s operating and financial
performance as it is the most comparable measure to the industry’s
market reference product margins, which are used by industry
analysts, investors, and others to evaluate our performance.
- Renewable diesel margin is defined as renewable diesel
segment operating income excluding operating expenses (excluding
depreciation and amortization expense) and depreciation and
amortization expense. We believe renewable diesel margin is an
important measure of our renewable diesel segment’s operating and
financial performance as it is the most comparable measure to the
industry’s market reference product margins, which are used by
industry analysts, investors, and others to evaluate our
performance.
- Ethanol margin is defined as ethanol segment operating
income (loss) excluding the LCM inventory valuation adjustment (see
note (b)), operating expenses (excluding depreciation and
amortization expense), and depreciation and amortization expense.
We believe ethanol margin is an important measure of our ethanol
segment’s operating and financial performance as it is the most
comparable measure to the industry’s market reference product
margins, which are used by industry analysts, investors, and others
to evaluate our performance.
- Adjusted refining operating income (loss) is defined as
refining segment operating income (loss) excluding the LCM
inventory valuation adjustment (see note (b)) and other operating
expenses. We believe adjusted refining operating income (loss) is
an important measure of our refining segment’s operating and
financial performance because it excludes items that are not
indicative of that segment’s core operating performance.
- Adjusted ethanol operating income (loss) is defined as
ethanol segment operating income (loss) excluding the LCM inventory
valuation adjustment (see note (b)). We believe this is an
important measure of our ethanol segment’s operating and financial
performance because it excludes an item that is not indicative of
that segment’s core operating performance.
- Adjusted net cash provided by operating activities is
defined as net cash provided by operating activities excluding the
items noted below. We believe adjusted net cash provided by
operating activities is an important measure of our ongoing
financial performance to better assess our ability to generate cash
to fund our investing and financing activities. The basis for our
belief with respect to each excluded item is provided below.
– Changes in current assets and current
liabilities – Current assets net of current liabilities represents
our operating liquidity. We believe that the change in our
operating liquidity from period to period does not represent cash
generated by our operations that is available to fund our investing
and financing activities.
– DGD’s adjusted net cash provided by
operating activities attributable to our joint venture partner’s
ownership interest in DGD – We are a 50/50 joint venture partner in
DGD and we consolidate DGD’s financial statements. Our renewable
diesel segment includes the operations of DGD and the associated
activities to market renewable diesel. Because we consolidate DGD’s
financial statements, all of DGD’s net cash provided by operating
activities (or operating cash flow) is included in our consolidated
net cash provided by operating activities.
DGD’s partners use DGD’s operating cash
flow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute
all of that cash to themselves. Nevertheless, DGD’s operating cash
flow is effectively attributable to each partner and only 50
percent of DGD’s operating cash flow should be attributed to our
net cash provided by operating activities. Therefore, we have
adjusted our net cash provided by operating activities for the
portion of DGD’s operating cash flow attributable to our joint
venture partner’s ownership interest because we believe that it
more accurately reflects the operating cash flow available to us to
fund our investing and financing activities. The adjustment is
calculated as follows (in millions):
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
DGD operating cash flow data
Net cash provided by operating
activities
$
256
$
516
$
463
$
683
Exclude: changes in current assets and
current liabilities
(8
)
378
(17
)
338
Adjusted net cash provided by operating
activities
264
138
480
345
Our partner’s ownership interest
50
%
50
%
50
%
50
%
DGD’s adjusted net cash provided by
operating activities attributable to our joint venture partner’s
ownership interest in DGD
$
132
$
69
$
240
$
173
- Capital investments attributable to Valero is defined as
all capital expenditures, deferred turnaround and catalyst cost
expenditures, and investments in unconsolidated joint ventures
presented in our consolidated statements of cash flows, excluding
the portion of DGD’s capital investments attributable to our joint
venture partner and all of the capital expenditures of other
VIEs.
DGD’s partners use DGD’s operating cash
flow (excluding changes in its current assets and current
liabilities) to fund its capital investments rather than distribute
all of that cash to themselves. Because DGD’s operating cash flow
is effectively attributable to each partner, only 50 percent of
DGD’s capital investments should be attributed to our net share of
total capital investments. We also exclude the capital expenditures
of our other consolidated VIEs because we do not operate those
VIEs. We believe capital investments attributable to Valero is an
important measure because it more accurately reflects our capital
investments.
(g)
The refining segment regions reflected herein contain the following
refineries:
U.S. Gulf Coast- Corpus Christi
East, Corpus Christi West, Houston, Meraux, Port Arthur,
St. Charles, Texas City, and Three Rivers Refineries;
U.S. Mid Continent- Ardmore,
McKee, and Memphis Refineries;
North Atlantic- Pembroke and
Quebec City Refineries; and
U.S. West Coast-
Benicia and Wilmington Refineries.
(h)
Primarily includes petrochemicals, gas
oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt.
(i)
Valero uses certain operating statistics
(as noted below) in the earnings release tables and the
accompanying earnings release to evaluate performance between
comparable periods. Different companies may calculate them in
different ways.
All per barrel of throughput, per gallon
of sales, and per gallon of production amounts are calculated by
dividing the associated dollar amount by the throughput volumes,
sales volumes, and production volumes for the period, as
applicable.
Throughput volumes, sales volumes, and
production volumes are calculated by multiplying throughput volumes
per day, sales volumes per day, and production volumes per day (as
provided in the accompanying tables), respectively, by the number
of days in the applicable period. We use throughput volumes, sales
volumes, and production volumes for the refining segment, renewable
diesel segment, and ethanol segment, respectively, due to their
general use by others who operate facilities similar to those
included in our segments. We believe the use of such volumes
results in per unit amounts that are most representative of the
product margins generated and the operating costs incurred as a
result of our operation of those facilities.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729005515/en/
Valero Contacts Investors: Homer Bhullar, Vice President
– Investor Relations and Finance, 210-345-1982 Eric Herbort, Senior
Manager – Investor Relations, 210-345-3331 Gautam Srivastava,
Senior Manager – Investor Relations, 210-345-3992 Media: Lillian
Riojas, Executive Director – Media Relations and Communications,
210-345-5002
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